We previously wrote about whether Peloton instructors are (or should be) subject to non-compete agreements owing to their prominent role as the “face” of the company. Today, we take a look at another “face” of Peloton (and other companies), as we consider the use of restrictive covenants for paid corporate spokespeople, such as actors who appear in company ads and “influencers” who use their social media popularity to promote products.
Continue Reading Preventing the “Face” of Your Company from Doing an About-Face for a Competitor

Continuing our annual tradition, we have compiled our top developments and headlines for 2019 & 2020 in trade secret, non-compete, and computer fraud law. Here’s what you need to know to keep abreast of the ever-changing law in this area.

1. Another Year, Another Attempt in Congress to Ban Non-Competes Nationwide

Senators Chris Murphy (D-Conn.) and Todd Young (R-Ind.) introduced legislation in 2019 entitled the Workforce Mobility Act (“WMA”). The WMA seeks to ban non-compete agreements outside of the sale of a business or dissolution of a partnership.

Not only would the WMA abolish covenants not to compete nationwide, outside of the extremely narrow exceptions highlighted above, but it would also provide the Department of Labor (DOL) and Federal Trade Commission (FTC) with broad enforcement power. If enacted, the legislation would empower the FTC and DOL to enforce the ban through fines on employers who either fail to notify employees that non-compete agreements are illegal or who require employees to sign covenants not to compete. Additionally, the WMA establishes a private right of action for all employees allegedly aggrieved by a violation of the WMA.

The WMA contains a carve out for parties to enter into an agreement to protect trade secrets. As currently drafted, the WMA does not abrogate the scope of protections provided by the Defend Trade Secrets Act.

Presently, there are no generally applicable federal restrictions on non-compete agreements, and enacting such a law would have to pass Constitutional muster. We expect to see continued activity at the federal legislative level to attempt to ban or limit the use of non-competes.

2. New State Legislation Regarding Restrictive Covenants


Continue Reading Top 10 Developments and Headlines in Trade Secret, Non-Compete, and Computer Fraud Law for 2019 & 2020

A California federal district court recently granted a temporary restraining order (“TRO”) against a former employee for misappropriating proprietary and confidential information in violation of the Defend Trade Secrets Act (“DTSA”), the California Uniform Trade Secrets Act (“CUTSA”), and company confidentiality and non-disclosure agreements. Bemis Co., Inc. v. Summers, No. 219CV00344TLNKJN, 2019 WL 1004853, at *1 (E.D. Cal. Feb. 28, 2019).

Background

Plaintiff Bemis Company, Inc. (“Bemis”) sued a former employee for trade secret misappropriation and breach of contract. Bemis is one of the largest global suppliers of flexible and rigid packaging products, including snack food bags, candy wrappers, cheese packaging, hot dog packaging, medicine packaging, and much more.
Continue Reading That’s a Wrap: California Federal Court Grants TRO Against Former Employee for Trade Secret Misappropriation

Seyfarth Synopsis: The New Jersey Legislature recently passed Senate Bill 121 affecting claims of discrimination, harassment, and retaliation, which if signed into law, would render any prospective waiver of rights against public policy, including pre-dispute mandatory arbitration agreements. In addition, non-disclosure provisions in settlement agreements involving these  claims would be unenforceable against employees. 

On January 31, 2019, the New Jersey Legislature passed Senate Bill 121, which would prohibit employers from enforcing, among other things, mandatory pre-dispute arbitration and non-disclosure provisions in settlement agreements for claims of discrimination, retaliation, and harassment.  The bill seemingly does not affect existing waivers or non-disclosure agreements (“NDAs”).  Governor Phil Murphy has not commented publicly as to whether he will sign the bill into law.  If signed, the breadth of this law would surpass any similar law in the country.


Continue Reading Pre-Dispute Arbitration Agreements and Non-Disclosure Provisions on the Chopping Block in New Jersey

Throughout 2018, Seyfarth Shaw’s dedicated Trade Secrets, Computer Fraud & Non-Competes Practice Group hosted a series of CLE webinars that addressed significant issues facing clients today in this important and ever-changing area of law. The series consisted of seven webinars:

  1. 2017 National Year in Review: What You Need to Know About the Recent Cases/Developments in Trade Secrets, Non-Compete and Computer Fraud Law
  2. Protecting Confidential Information and Client Relationships in the Financial Services Industry
  3. The Anatomy of a Trade Secret Audit
  4. Protecting Trade Secrets from Cyber and Other Threats
  5. 2018 Massachusetts Non-Compete and Trade Secrets Reform
  6. Protecting Trade Secrets Abroad and Enforcing Rights Abroad and in the U.S.
  7. Criminal Trade Secret Theft: What You Need to Know

As a conclusion to this well-received 2018 webinar series, we compiled a list of key takeaway points for each program, which are listed below. For those clients who missed any of the programs in this year’s series, recordings of the webinars are available on the blog, or you may click on the title of each available webinar below for the online recording. Seyfarth Trade Secrets, Computer Fraud & Non-Compete attorneys are happy to discuss presenting similar presentations to your company for CLE credit. Seyfarth will continue its trade secrets webinar programming in 2019, and we will release the 2019 trade secrets webinar series topics in the coming weeks.
Continue Reading 2018 Trade Secrets and Non-Competes Webinar Series Year in Review

  1. Have trade secret protections. Built into the definition of a trade secret is the requirement to have reasonable secrecy measures. Companies that do not use non-disclosure agreements with their employees can be at a tremendous disadvantage if they decide to litigate against former employees for trade secret misappropriation. Well thought out policies, procedures, and agreements

On Wednesday, November 28, 2018, at 1:00 to 2:30 p.m. Eastern, Seyfarth Partner and Trade Secrets, Computer Fraud & Non-Compete Practice Group Co-Chair Robert Milligan is presenting a Strafford live webinar. The “Drafting Enforceable Non-compete and Non-Solicitation Agreements: Compliance with New State Statutes and Case Law” webinar panel will discuss recent legislative and case law

In Seyfarth’s sixth installment in its 2018 Trade Secrets Webinar Series, Seyfarth attorneys Daniel Hart, Marjorie Culver, Alex Meier, and Paul Yovanic Jr. focused on how to identify the greatest threats to trade secrets, tips and best practices for protecting trade secrets abroad, and enforcement mechanisms and remedies.

As a conclusion to this well-received webinar,

As a special feature of our blog—guest postings by experts, clients, and other professionals—please enjoy this blog entry from Donal O’Connell, Managing Director of Chawton Innovation Services Ltd.

Managing trade secrets belonging to Third Parties:

At first glance, you may be somewhat perplexed by the title. When and why should a company be concerned about managing trade secrets belonging to some 3rd party? It is tough enough for most companies to properly and professionally manage their own trade secrets, not to mind worrying about the trade secrets belonging to others. However, more and more, companies are indeed facing the challenge of having to manage trade secrets belonging to others. Allow me to explain.
Continue Reading The Sharing of Trade Secrets with Others

The Texas Court of Appeals, Third District, issued an opinion in Tejas Vending, LP, et al. v. Tejas Promotions, LLC further delineating the applicability of Texas’s anti-SLAPP statute, the Texas Citizens Participation Act (“TCPA”). The Court emphasized that the TCPA was applicable to a conspiracy to misappropriate trade secrets claim, but found that it did not apply to requests for declaratory relief. This holding serves as a reminder that anti-SLAPP statutes can be a powerful shield in misappropriation of trade secret cases, particularly when such cases involve claims for an alleged conspiracy.
Continue Reading The Texas Court of Appeals for the Third District Holds that the Texas Anti-SLAPP Statute Applies to a Conspiracy to Misappropriate Trade Secrets Claim